INVESTING CHANNEL
Asset Allocation Calculator
Calculate standard target splits between equities, fixed-income, and cash based on your age.
Calculator Variables
Calculation Overview
Find your target stocks, bonds, and cash mix based on age and custom investment risk parameters.
Mathematical Model & Formula
Stocks % = Base - Age
A classic bogleheads asset allocation rule of thumb which dynamically shifts towards conservative fixed-income as you age.
Variables Defined:
- Base: Risk parameter (100, 110, or 120)
- Age: Current age of the investor
Worked Example Scenario
Scenario: A 30-year-old using the Rule of 110.
- Stocks = 110 - 30 = 80%
- Bonds = 100% - 80% = 20%
Result: 80% Stocks / 20% Bonds allocation.
Frequently Asked Questions
Why does allocation change with age?
As you approach retirement, you have less time to recover from stock market downturns, necessitating a shift towards stable bonds.